REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into as of ______ __, 2007, by and among Key Hospitality
Acquisition Corporation, a Delaware corporation (the “Company”),
and
the parties signatory hereto (each a “Stockholder”
and
collectively, the “Stockholders”),
who
are the former members of Cay Clubs, LLC, a Florida limited liability company
(“Cay Clubs”).
WHEREAS,
the Company and the Stockholders have entered into a certain Merger Agreement,
dated as of March 22, 2007 (the “Merger
Agreement”),
pursuant to which the Company will merge its wholly-owned subsidiary into Cay
Clubs; and
WHEREAS,
the Company wishes to grant the Stockholders certain registration rights in
connection with the shares of common stock of the Company they will acquire
as a
result of the Merger Agreement and the transactions contemplated
thereby.
NOW,
THEREFORE, in consideration of the foregoing recitals and the mutual promises
and covenants hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
Merger Agreement shall have the meanings given such terms in the Merger
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
“Business
Day”
means
any day except Saturday, Sunday and any day which shall be a federal legal
holiday or a day on which banking institutions in the State of New York are
authorized or required by law or other governmental action to
close.
“Effectiveness
Date”
means
the fifth (5th)
Business Day following the date on which the Company is notified by the
Commission that the Registration Statement will not be reviewed or is no longer
subject to further review and comments.
“Effectiveness
Period”
shall
have the meaning set forth in Section 2(a).
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Filing
Date”
means
the [60th calendar day following the Closing Date].
“Holder”
or
“Holders”
means
the holder or holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified
Party”
shall
have the meaning set forth in Section 5(c).
“Indemnifying
Party”
shall
have the meaning set forth in Section 5(c).
“Losses”
shall
have the meaning set forth in Section 5(a).
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“Proceeding”
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Prospectus”
means
the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Registrable
Securities”
means
the shares of Common Stock issued in connection with the transactions
contemplated by the Merger Agreement, together with any Securities issued or
issuable upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing.
“Registration
Statement”
means
the registration statement required to be filed hereunder, including the
Prospectus, amendments and supplements to the registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in the Registration Statement.
“Rule
415”
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Rule
424”
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Trading
Market”
means
whichever of the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which
the Common Stock is listed or quoted for trading on the date in
question.
2. Registration.
On or
prior to the Filing Date, the Company shall prepare and file with the Commission
the Registration Statement covering the resale of all of the Registrable
Securities issued in the Merger for an offering to be made on a continuous
basis
pursuant to Rule 415, or if Rule 415 is not available for offers or sales of
the
Registrable Securities, for such other means of distribution of Registrable
Securities as the Holders may specify. The Registration Statement required
hereunder shall be on Form S-3 (except if the Company is not then eligible
to
register for resale the Registrable Securities on Form S-3, in which case the
Registration shall be on another appropriate form in accordance herewith).
The
Registration Statement required hereunder shall contain (except if otherwise
directed by the Holders) the “Plan
of Distribution”
attached hereto as Annex
A.
The
Company shall use its commercially reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof and shall use its commercially reasonable
efforts to keep such Registration Statement continuously effective under the
Securities Act (including the filing of any necessary amendments, post-effective
amendments and supplements) until the date which is two years after the Closing
Date or such later date when all Registrable Securities covered by the
Registration Statement (a) have been sold pursuant to the Registration Statement
or an exemption from the registration requirements of the Securities Act or
(b)
may be sold without volume restrictions pursuant to Rule 144(k) promulgated
under the Securities Act, as determined by the counsel to the Company pursuant
to a written opinion letter to such effect, addressed to the Company’s transfer
agent (the “Effectiveness
Period”).
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3. Registration
Procedures
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a) Not
less
than three (3) Business Days prior to the filing of the Registration Statement
or any related Prospectus or any amendment or supplement thereto, (i) furnish
to
the Holders copies of all such documents proposed to be filed (including
documents incorporated or deemed incorporated by reference to the extent
requested by such Person) which documents will be subject to the review of
such
Holders, and (ii) cause its officers and directors, counsel and independent
certified public accountants to respond to such inquiries as shall be necessary,
in the reasonable opinion of respective legal counsel to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities shall reasonably object in good faith.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep the Registration Statement continuously
effective as to the Registrable Securities for the Effectiveness Period; (ii)
cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant
to
Rule 424; (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to the Registration Statement or
any
amendment thereto; and (iv) comply in all material respects with the provisions
of the Securities Act and the Exchange Act with respect to the disposition
of
all Registrable Securities covered by the Registration Statement in accordance
with the intended methods of disposition by the Holders thereof set forth in
the
Registration Statement as so amended or in such Prospectus as so
supplemented.
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(c) Notify
the Holders of Registrable Securities to be sold as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than two (2) Business
Days
prior to such filing) and (if requested by any such Person) confirm such notice
in writing promptly following the day (i) (A) when a Prospectus or any
Prospectus supplement or post-effective amendment to the Registration Statement
is proposed to be filed; (B) when the Commission notifies the Company whether
there will be a “review” of the Registration Statement and whenever the
Commission comments in writing on the Registration Statement (the Company shall
upon request provide true and complete copies thereof and all written responses
thereto to each of the Holders); and (C) with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other Federal or state governmental
authority during the period of effectiveness of the Registration Statement
for
amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of the Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose, and (v) of the occurrence of
any
event or passage of time that makes the financial statements included in the
Registration Statement ineligible for inclusion therein or any statement made
in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material
fact
or omit to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading.
(d) Use
its
commercially reasonable efforts to avoid the issuance of, or, if issued, obtain
the withdrawal of (i) any order suspending the effectiveness of the Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(e) To
the
extent requested by such Holders, furnish to each Holder, without charge, at
least one conformed copy of the Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
(including those previously furnished or incorporated by reference) promptly
after the filing of such documents with the Commission.
(f) Promptly
deliver to each Holder, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request in connection with
resales by the Holder of Registrable Securities. The Company hereby consents
to
the use of such Prospectus and each amendment or supplement thereto by each
of
the selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto,
except after the giving of any notice pursuant to Section 3(b).
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(g) Use
its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the Registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each of the registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all
other
acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statement; provided, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified, subject
the Company to any material tax in any such jurisdiction where it is not then
so
subject or file a general consent to service of process in any such
jurisdiction.
(h) If
requested by the Holders, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
to
be delivered to a transferee pursuant to the Registration Statement, which
certificates shall be free, to the extent permitted by the Merger Agreement,
of
all restrictive legends, and to enable such Registrable Securities to be in
such
denominations and registered in such names as any such Holders may
request.
(i) Upon
the
occurrence of any event contemplated by Section 3(c)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to
the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(j) Comply
with all applicable rules and regulations of the Commission and use its
commercially reasonable efforts to cause all Registrable Securities to be listed
for trading on a Trading Market.
The
Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by
such
Holder and, if required by the Commission, the person thereof that has voting
and dispositive control over the Shares.
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4. Registration
Expenses.
All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The
fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
Trading Market on which the Common Stock is then listed for trading, and (B)
for
compliance with applicable state securities or Blue Sky laws), (ii) printing
expenses (including, without limitation, expenses of printing certificates
for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the Holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for
the
Company, (v) Securities Act liability insurance, if the Company so desires
such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated
by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation,
all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions or any legal fees or other
costs of the Holders.
5. Indemnification
(a) Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless each Holder, the officers, directors, agents and employees of
each
of them, each Person who controls any such Holder (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable
attorneys' fees) and expenses (collectively, “Losses”),
as
incurred, to the extent arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement,
any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (1) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable
Securities as set forth in Annex
A
hereto
or any changes to Annex
A
hereto
that are expressly approved in writing by such Holder expressly for use in
the
Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto or (2) in the case of an occurrence of an event
of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an
outdated or defective Prospectus after the Company has notified such Holder
in
writing that the Prospectus is outdated or defective and prior to the receipt
by
such Holder of the Advice contemplated in Section 6(c). The Company shall notify
the Holders promptly of the institution, threat or assertion of any Proceeding
of which the Company is aware in connection with the transactions contemplated
by this Agreement.
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(b) Indemnification
by Holders.
Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of
such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses, as incurred, to the extent arising out of or based
upon: (x) such Holder's failure to comply with the prospectus delivery
requirements of the Securities Act or (y) any untrue or alleged untrue statement
of a material fact contained in the Registration Statement, any Prospectus,
or
any form of prospectus, or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading (i) to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so
furnished in writing by such Holder to the Company specifically for inclusion
in
the Registration Statement or such Prospectus or (ii) to the extent that (1)
such untrue statements or omissions are based solely upon information regarding
such Holder furnished in writing to the Company by such Holder expressly for
use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities as set forth
in Annex
A
hereto
or any changes to Annex
A
hereto
that are expressly approved in writing by such Holder expressly for use in
the
Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto, or (2) in the case of an occurrence of an
event
of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an
outdated or defective Prospectus after the Company has notified such Holder
in
writing that the Prospectus is outdated or defective and prior to the receipt
by
such Holder of the Advice contemplated in Section 6(b). In no event shall the
liability of any selling Holder hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities covered by the Registration Statement giving rise to
such
indemnification obligation.
(c) Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”),
such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying
Party”)
in
writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to
the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have prejudiced the Indemnifying Party.
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An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to
such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing
that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof
and the reasonable fees and expenses of one separate counsel shall be at the
expense of the Indemnifying Party). The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect
of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
All
reasonable fees and expenses of the Indemnified Party (including reasonable
fees
and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten
Business Days of written notice thereof to the Indemnifying Party; provided,
that
the Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is not entitled to indemnification hereunder, determined
based
upon the relative faults of the parties.
(d) Contribution.
If a
claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.
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The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which
the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that
such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud
by
such Holder. The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to
the
Indemnified Parties.
6. Miscellaneous
(a) Compliance.
Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.
(b) Discontinued
Disposition.
Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the
kind
described in Section 3(c), such Holder will forthwith discontinue disposition
of
such Registrable Securities under the Registration Statement until such Holder's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement or until it is advised in writing (the “Advice”)
by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. In the event of a discontinued disposition under this
Section 6(b), the Company will use its commercially reasonable efforts to
provide copies of the supplemented Prospectus and/or amended Registration
Statement or the Advice as soon as possible in order to enable each Holder
to
resume dispositions of the Registrable Securities. The Company may provide
appropriate stop orders to enforce the provisions of this paragraph.
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(c) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless the same shall be in writing
and
signed by the Company and each Holder of the then outstanding Registrable
Securities.
(d) Lock-up.
Until
the Stockholders beneficially own less than 5% (on a fully-diluted basis) of
the
outstanding Common Stock and securities convertible or exchangeable into Common
Stock, if the Company delivers to the Stockholders a certificate signed by
an
officer of the Company stating that the managing underwriter of a registered
public offering of equity securities of the Company, all of which relates to
securities to be sold on a primary basis by the Company (the “Offering”),
has
requested that the Stockholders refrain from selling or otherwise transferring
or disposing of any Registrable Securities then held by the Stockholders for
a
specified period of time during the Offering, the Stockholders shall refrain
from selling or otherwise transferring or disposing of any Registrable
Securities then held by the Stockholders beginning on the later of (i) the
10th
Business
Day after receipt of such certificate from the Company and (ii) the commencement
of the Offering (which shall be the effective date of the registration statement
for such Offering) and ending following a specified period of time that is
customary under the circumstances (not to exceed ninety (90) days); provided,
however, that no holder of Registrable Securities shall be restrained from
selling or otherwise transferring or disposing of Registrable Securities under
this Section 6(f) unless the directors and officers of the Company, and all
holders of 5% or more (on a fully diluted basis) of the outstanding Common
Stock
and securities convertible or exchangeable into Common Stock, are also so
restrained.
(e) Suspension
of Trading.
At any
time after the Registrable Securities are covered by an effective Registration
Statement, the Company may deliver to the Holders of such Registrable Securities
a certificate (the “Suspension
Certificate”)
approved by the Chief Executive Officer of the Company and signed by an officer
of the Company stating that the effectiveness of and sales of Registrable
Securities under the Registration Statement would:
(i) materially
interfere with any transaction that would require the Company to prepare
financial statements under the Securities Act that the Company would otherwise
not be required to prepare in order to comply with its obligations under the
Exchange Act, or
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(ii) require
public disclosure of any transaction of the type discussed in Section 6(e)(i)
prior to the time such disclosure might otherwise be required.
Beginning
ten (10) Business Days after the receipt of a Suspension Certificate by Holders
of Registrable Securities, the Company may, in its discretion, require such
Holders of Registrable Securities to refrain from selling or otherwise
transferring or disposing of any Registrable Securities or other Company
securities then held by such Holders for a specified period of time that is
customary under the circumstances (not to exceed thirty (30) days).
Notwithstanding the foregoing sentence, the Company shall be permitted to cause
Holders of Registrable Securities to so refrain from selling or otherwise
transferring or disposing of any Registrable Securities or other securities
of
the Company on only one occasion during each twelve (12) consecutive month
period that the Registration Statement remains effective. The Company may impose
stop transfer instructions to enforce any required agreement of the Holders
under this Section 6(e).
(f) Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number provided for below prior
to
5:00 p.m. (New York City time) on a Business Day, (ii) the Business Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number provided for below later than 5:00 p.m. (New
York City time) on any date and earlier than 11:59 p.m. (New York City time)
on
such date, (iii) the Business Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt
by
the party to whom such notice is required to be given. The address and delivery
requirements for such notices and communications shall be delivered and
addressed as set forth in the Merger Agreement.
(g) Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties and shall inure to the benefit of
each
Holder. Each Holder may assign their respective rights hereunder in the manner
and to the Persons as permitted under the Merger Agreement.
(h) Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
11
(i) Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof.
(j) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
(k) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be
hereafter declared invalid, illegal, void or unenforceable.
(l) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(m) Independent
Nature of Stockholders' Obligations and Rights.
The
obligations of each Stockholder hereunder are several and not joint with the
obligations of any other Stockholder hereunder, and no Stockholder shall be
responsible in any way for the performance of the obligations of any other
Stockholder hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Stockholder
pursuant hereto or thereto, shall be deemed to constitute the Stockholders
as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Stockholders are in any way acting in concert
with
respect to such obligations or the transactions contemplated by this Agreement.
Each Stockholder shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not
be
necessary for any other Stockholder to be joined as an additional party in
any
proceeding for such purpose.
*************************
12
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
| KEY HOSPITALITY ACQUISITION CORPORATION | ||
| |
|
|
| By: | ||
|
[Name], [Title] |
||
[STOCKHOLDERS’
SIGNATURE PAGES TO FOLLOW]
13
[STOCKHOLDERS’
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
[NAME
OF STOCKHOLDER]
| By: |
|
Name: |
| Title: |
|
Fax
Number:
|
[ADDITIONAL
STOCKHOLDER SIGNATURES FOLLOW]
ANNEX
A
Plan
of Distribution
The
shares covered by this prospectus may be offered and sold from time to time
by
the selling stockholders. The term “selling stockholder” includes pledgees,
donees, transferees or other successors in interest selling shares received
after the date of this prospectus from each selling stockholder as a pledge,
gift, partnership distribution or other non-sale related transfer. The number
of
shares beneficially owned by a selling stockholder will decrease as and when
it
effects any such transfers. The plan of distribution for the selling
stockholders’ shares sold hereunder will otherwise remain unchanged, except that
the transferees, pledgees, donees or other successors will be selling
stockholders hereunder. To the extent required, we may amend and supplement
this
prospectus from time to time to describe a specific plan of
distribution.
The
selling stockholders will act independently of us in making decisions with
respect to the timing, manner and size of each sale. The selling stockholders
may make these sales at prices and under terms then prevailing or at prices
related to the then current market price. The selling stockholders may also
make
sales in negotiated transactions. The selling stockholders may offer their
shares from time to time pursuant to one or more of the following
methods:
| · |
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
| · |
one
or more block trades in which the broker-dealer will attempt to sell
the
shares as agent but may position and resell a portion of the block
as
principal to facilitate the transaction;
|
| · |
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
| · |
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
| · |
public
or privately negotiated transactions;
|
| · |
on
the American Stock Exchange or Nasdaq National Market (or through the
facilities of any national securities exchange or U.S. inter-dealer
quotation system of a registered national securities association, on
which
the shares are then listed, admitted to unlisted trading privileges
or
included for quotation);
|
| · |
through
underwriters, brokers or dealers (who may act as agents or principals)
or
directly to one or more purchasers;
|
| · |
a
combination of any such methods of sale;
and
|
A-1
| · |
any
other method permitted pursuant to applicable
law.
|
In
connection with distributions of the shares or otherwise, the selling
stockholders may:
| · |
enter
into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the shares
in the
course of hedging the positions they
assume;
|
| · |
sell
the shares short and redeliver the shares to close out such short
positions;
|
| · |
enter
into option or other transactions with broker-dealers or other financial
institutions which require the delivery to them of shares offered by
this
prospectus, which they may in turn resell;
and
|
| · |
pledge
shares to a broker-dealer or other financial institution, which, upon
a
default, they may in turn resell.
|
In
addition to the foregoing methods, the selling stockholders may offer their
shares from time to time in transactions involving principals or brokers not
otherwise contemplated above, in a combination of such methods or described
above or any other lawful methods. The selling stockholders may also transfer,
donate or assign their shares to lenders, family members and others and each
of
such persons will be deemed to be a selling stockholder for purposes of this
prospectus. The selling stockholders or their successors in interest may from
time to time pledge or grant a security interest in some or all of the shares
of
common stock, and if the selling stockholders default in the performance of
their secured obligations, the pledgees or secured parties may offer and sell
the shares of common stock from to time under this prospectus; provided however
in the event of a pledge or then default on a secured obligation by the selling
stockholder, in order for the shares to be sold under this registration
statement, unless permitted by law, we must distribute a prospectus supplement
and/or amendment to this registration statement amending the list of selling
stockholders to include the pledgee, secured party or other successors in
interest of the selling stockholder under this prospectus.
The
selling stockholders may also sell their shares pursuant to Rule 144 under
the Securities Act, which permits limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions, including,
among other things, the availability of certain current public information
concerning the issuer, the resale occurring following the required holding
period under Rule 144 and the number of shares being sold during any
three-month period not exceeding certain limitations.
Sales
through brokers may be made by any method of trading authorized by any stock
exchange or market on which the shares may be listed or quoted, including block
trading in negotiated transactions. Without limiting the foregoing, such brokers
may act as dealers by purchasing any or all of the shares covered by this
prospectus, either as agents for others or as principals for their own accounts,
and reselling such shares pursuant to this prospectus. The selling stockholders
may effect such transactions directly, or indirectly through underwriters,
broker-dealers or agents acting on their behalf. In effecting sales,
broker-dealers or agents engaged by the selling stockholders may arrange for
other broker-dealers to participate. Broker-dealers or agents may receive
commissions, discounts or concessions from the selling stockholders, in amounts
to be negotiated immediately prior to the sale (which compensation as to a
particular broker-dealer might be in excess of customary commissions for routine
market transactions).
A-2
In
offering the shares covered by this prospectus, the selling stockholders, and
any broker-dealers and any other participating broker-dealers who execute sales
for the selling stockholders, may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with these sales. Any profits
realized by the selling stockholders and the compensation of such broker-dealers
may be deemed to be underwriting discounts and commissions.
The
Company is required to pay all fees and expenses incident to the registration
of
the shares.
The
Company has agreed to indemnify the selling stockholders against certain losses,
claims, damages and liabilities, including liabilities under the Securities
Act.
A-3
